Is physical silver a cheap purchase at $15 an oz? (Part 1 of 2)

Is physical silver a cheap purchase at $15 an oz?  (Part 1 of 2)

Welcome to illuminati silver, we tell you
the truth about silver. Today is Sunday 27th March 2016 and we are
asking the question is physical silver a cheap purchase at $15 an oz, especially as it’s
fallen from a high of $50 during the past 5 years.
Well firstly you should ask yourself what is your time horizon?
If you said just 12 months, we would say do not waste your time buying physical, but perhaps
paper trade it – because even if silver jumped $2 – $3 an oz you would still lose
money based on buying and selling spreads and premiums.
If you said 10+ years then our view would be somewhat different – and this is why:
Supply: The Silver Institute has quoted in its February
2016 report “Global mine supply production is projected to fall in 2016 by as much as
5% year-on-year….. many analysts expect global silver mine production to fall through
2019 as primary silver production from more mature operations begins to drop”.
OK that sounds promising – reduction in physical mine supply – but what about recycling
we hear you ask. Well again according to the Silver Institute: “Scrap supply, which has
been on the decline for several years, should further weaken in 2016. This outlook is based
on additional losses in photographic scrap, a depleted pool of near-market silverware,
jewellery and coins, and slowed scrap flows from industrial sources.”
Now this sounds even more promising – and yet there is a third part to this supply equation:
It’s important to consider that the majority of silver that is mined comes as a by-product
of mining operations for other metals. Approximately 55% of all silver produced comes from copper,
lead, and zinc mining. Another 13% comes as a by-product of gold mining, leaving less
than a third being mined in its own right. So, much like gold miners, copper producers
are struggling to cope with low spot prices. One of the ways they are trying to survive
is by cutting production. Nine of the largest copper producers announced they would cut
output by 200,000 metric tons in the first quarter of 2016.
The contraction in the base metals mining industry may indeed contribute to supply tightness
in silver and if it continues may exceed the 5% mine production fall mentioned by the Institute.
Now we must not forget about above ground available stocks, about which opinion is divided,
but the consensus rests somewhere between 1 billion and 2 billion available ounces.
Now any deficit in mine supply of 50 million ounces or less, can easily be catered for
by this above ground stock, however, for such stocks to leave the hands of its owners then
the price will have to rise from current levels. Nevertheless it is available, but once again
it would not take many years of decreasing supply to make an impact on these.
Now let us take a look at demand. Demand:
More than 50% of demand comes from industry. In fact in 2015, according to the Silver Institute
industrial fabrication demand accounted for an estimated 54% of total physical silver
demand. Now here is the exciting part, it quotes “photovoltaics
for solar energy is projected to rise in 2016 and surpass the 2011 peak of 75.8 million
ounces”, primarily the result of solar panels which could account for as much as 13% of
total silver demand in 2016 compared with 1.4% in 2006.
Some more good news: “Silver demand from ethylene oxide producers is expected to jump
to over 10 million ounces this year – an increase of more than 25% compared with 2015”.
The bulk of this demand is expected to come from China (which is one reason why we frequently
state; watch what is happening in China). Now if this is not enough good news for silver
bulls, well even jewellery fabrication is expected to increase by 5% in 2016 – with
the envisaged fall in demand in China being made up elsewhere.
It gets even better; Coin demand too is expected to be robust following a record 130 million
oz of demand in 2015. Many analysts predict that with prices being as low as they are
even this record may be surpassed, especially as early signs show that both US and Canadian
Mints are forecast to run out of ‘blanks’ later this year should this trend continue.
For the record in 2015 coin demand made up an estimated 12% of total physical demand.
Finally Indian silver demand in 2016 is also expected to grow on the back of investor interest
and growth in jewellery, decorative items and silverware fabrication. In 2015 it imported
some 228 million oz of silver bullion; and similar if not greater amounts are anticipated
this year. So all of this is expected to lead to a widening
of the deficit between supply and demand which should prove positive for prices. Yes? Well
not quite, as the Silver Institute notes: “While such deficits do not necessarily
influence prices in the near term, multiple years of annual deficits can begin to apply
upward pressure to prices in subsequent periods.” Ok then, that’s fair enough, however we
hear you argue; Silver hasn’t been so cheap relative to gold for more than seven years
and with mine supplies forecast to contract this year that may be a sign it’s ready
to come out of the yellow metal’s shadow and investors will sell their gold and buy
silver thereby increasing its price. Well theoretically yes but with the ratio
standing around 80:1 according to Ned Naylor-Leyland, Manager of Old Mutual’s Gold and Silver
Fund in London, “The ratio can go higher still, but at some point it will turn, and
when it turns it tends to turn with real vigor,” but he adds “I’m not moving yet. When
the trend change is clear, I’ll be ready to move money across from gold to silver.”
Capital Economics too have indicated that the GSR could fall back to 70:1 later this
year and towards 65:1 in 2017. However, data compiled by Bloomberg shows
that while investors have embarked on a gold buying spree, increasing their holdings in
exchange-traded funds by 18% this year, they reduced their assets in silver products by
1.2% through February. However this has reversed in March when ETFs backed by silver had their
biggest inflows over three days since 2013, rising 500 metric tons to the highest since
September. So all is looking good and hearty for silver.
Is there anything we’ve forgotten? Oh yes Economic slowdown, Deflation and Negative
Interest rates. Please tune in to part 2 which will be published
tomorrow. We hope you have found this video interesting
and informative and if so, please give it a thumb up and share it on twitter. Also kindly
visit our website at and look at our Facebook page which is updated
daily at Disclaimer: Illuminati Silver owners come from a background
of Banking, International Wealth Management and Economics. Having now retired from these
worlds we are not qualified to give investment advice. Therefore, this and other productions
must not be deemed to be giving such advice and merely represent the personal views of
its owners.


  1. I always looked at silver as a 10 to 15 year venture… A friend of mine bought a few kilo bars after I talked about the basics of silver investing, apparently wasn't paying too much attention. Two weeks later he asked "how long till till we flip these things for a profit"? After again explaining the timelines he sold them to me for spot.. I'm thinking this is a good way for me to accumulate at spot.. Lol

  2. A year from now, silver might be $75.00… or $7.50… or $15.00… or something else nobody can even fathom. Who knows. You roll the dice and you take your chances.

  3. I love these incisive videos. I'm definitely eager for part 2. 2008 – 2011 was a good recent lesson in the power of financial panic. I wonder just how aggressive the government/bankers will get with price suppression as confidence falls.

  4. Who cares whether it's cheap? It's SHINY. I don't understand why people think the gold silver ratio means anything. The two metals are not fully substitutable. Apart from Indian buyers who will switch into buying silver jewelry if gold becomes too expensive, the two are not really substitutable at all. As such, they should just find their own prices based on their respective supply and demand. The ratio could go to 100, 120, 150 or more.

  5. I do not believe silver is cheap yet. the problem is that the $50 region was not realistic it basically made that huge move in 4 months. if you take the the 40 year chart and look at it as a guide it gets scary. Silver had a triple top which each time being a lower high. lower highs tell of lower lows. I personally think that the big banks manipulated the silver price higher in 2011 to get more money from dumb investors. what do you tell the investor who went all in at $45,43,,18,16. Sure buying now looks better then those numbers just listed but what if silver goes to $7.50 first you just lost 50% of your wealth. If investing in precious metals over the years as taught me anything is they will do the opposite of what people and pumpers say. there is still way to much pumping going on and more dealers need to go bankrupt before I get real comfortable about calling a bottom

  6. so many people believing the Bo polny …mike malonys of the world silver will go higher but I agree with +Illuminati in the long term no time soon for the next 3 years youl be lucky to see 17$

  7. i purchase au every month at the best dip possible,so the ? of 15.00 is mute.we will see 10 year.if it goes to 12 in 2017 im in.

  8. Thank you for your analysis of this most complex investment sector. There are many factors for the intelligent investor to consider and your concise arguments at this time are understood, appreciated and worthy of further private research.

  9. Great video…;)…I just hope Silver stays around $15 or lower for a long time..til I reach my stacking goals..!!!…but I'm not counting on that happening..just;)

  10. Based on my limited experience if the price of silver drops lower than expected the big three …..JMB Provident and apmex will all raise up their premiums and limit the sales of anything in demand . Iam buying carefully low mintage limited birds horses or monkeys….see what shakes out …….Thanks again I.S. for your time and valuable information has it really been a whole year? congrats!! on you and the gang! continued success on your much appreciated Community of Illuminati Silver.

  11. Thank you. I have a 15 to 20 time line. As long as I am practicing and have my law practice I will have a significant income surplus. I am in my 48. My main partner is a great younger woman in her mid 30's and i love our work life together so I do not envision slowing down for 15 or so years — we have some other partners to do our overflow work and associates, so I am mainly concerned about retaining the value of my earnings. This was very helpful.

  12. I'm yearning for silver to hit a EVEN NICER price point… I hope it hits that point around June/Aug 2017…

    I'm banking on a $12 – $13 price point… If it went as low as $10 that would be a REAL blessing for me.

    All I'm doing now is saving up some currency… My target is a 2,500+ OZ silver purchase at one time.

    What do you all think? … Is 2,500+ OZ enough silver for one young man? … Btw, I'll be 25 yrs old by June/Aug 2017.

    Pls give me some feedback… & Is my price target a foolish dream or could it possibly happen?

    If I can get enough silver to where I can cash out my bullion at $90K or $100K then I have no complaints…

    What do you guys think? …. Also, what are some of you guys' plans after cashing in? …. Investments? Buy a house? etc?

  13. Hm, iho one should not (only) look at the price of silver in terms of the US dollar (fiat).
    Is silver cheap? Not compared to the historic price average of oil. But compared to real estate prices in London it certainly is.
    Is it cheap compared to stocks close to all-time highs?
    Is it cheap compared to the volume of US treasuries or the volume of the derivative market?

    I agree, that this is not a get rich quick game. Generally investors have a time horizont of 5-20 years. A person with a 1 year time horizont is a speculator in my view. If you have no physical silver at all, I say it is a very good oportunity to start buying a first position. If you are already heavily loaded, you can lean back and wait for 12-14 USD before you start buying more. Not giving any advise here, just my personal view.

  14. Great vid. We are in that 10+ range…before we would need to cash anything in…so I'm rather liking $15.00 Silver…still could go to $12.00 or 10.00 but I will continue to roll the Dice ….until it gets to $20.00! Then will hold my hand for the most part! 🙂

  15. It is what I have said all the time, previous metals are a long term investment and saving.
    That is the great thing about previous metals, it have this duel purpose, being both an investment and a way to save. I will go so far as to say that it is the only way to save money, as currency in the bank have never, or very rarely been able to produce a net positive interest rate return when we take inflation into account.
    And if we look at we can see that since 2001 gold have yielded an annual return of 11% and silver 10,8%
    Gold have only depreciated in 2013 2014 and 2015, silver have had a few more bad years but its good years have been all the better.
    And in an environment of NIRP gold and silver giving no interest have started to take on a directly more positive light, as no interest is better then negative interest.

  16. Great report brother IS, I've been buying silver to aid (not solely) in my retirement in some 20+ years. This has assured me I'm doing the right thing.

  17. Mrdtruck88 has it so right. Don't find yourself caught up in the day-to-day market reactions and opinions. Greenspan already illuminated us by his statement that precious metals will be "measurably" higher within the next 10 years. Combine this with what Ben Bernanke said, that rates "will not normalize in his lifetime". I think we all should be concerned with the US government banning the buying/holding of Gold and Silver when prices rise significantly. Illuminati Silver: should those of us who own precious metals, store our metal outside the US?

  18. The problem with some people that stack silver and gold is they will allow greed to keep them from profiting when the time does come to liquidate thinking they can squeeze a few more $ per ounce out of their holdings. I think that also too many stackers have become addicted to holding metals and some will be hard pressed to part with their PRECIOUS when the price does go up . The thought that they can no longer look at their shinny stockpile of security will be too much for them to handle. I have seen this mindset in the stock market where people hang on too long because they think the stock will keep rising. Yes China's reduction in base metals consumption will effect the silver industry. As stated silver is a by product of base metal mining . Another great piece of information. To those 2 trolls that thumbs downed this nice piece of research. Well I suggest you learn to surround yourself with smarter people. It does pay down the road.

  19. This is all very very very nice in theory…………..But image a bank in south europe collapse or a nation go,s bankrubt……See what happens then,and i personly see that happen more and more Ukraine Belarus Venzuela Suriname and the list grows grows If u add Italy Spain to it then i personaly have silver and no € notes..

  20. $15 oz silver is totally worth a bite. Long term dollar cost averaging is the only sure way for anyone without a crystal ball. One thing to remember is to avoid pouring in vast sums of money at anything above this current level. If the price falls i feel one can pick up the pace on buying as it may even see $10. There are to many external potential black swan factors that may play with the price. While some of these factors are due to true market forces, others will be the result of tampering/rigging and those are very hard to see coming.

  21. This is a load of crap. I have had some of My Morgan Dollars double in value in the last Year. These people are so full of crap their eyes are brown. J.P. Morgan is doing just the opposite of what these idiots are putting out to the public. Their crap is Do as I Say Not As I Do.

  22. It is really exhausting listening to your slow and kinda creepy voice and without any visuals. You should change that. Also, turn up your volume a bit

  23. i only listen to you because you do not try to use scare tactics either for or against silver,.You arent trying to sell me a dream nor scare me into doing hasty moves.Just plain facts you are awesome!!

  24. i would like to write a piece for the channel on bitcoin and how to use it to buy gold and silver, but im not ready to give up my secrets yet

  25. If you bought rounds for .60 over spot you are looking pretty smart right now. However, I do agree with Mr. Illuminati about a longer time horizon and a thoughtful exit strategy. When you do exit, roll it into something physical ( farmland ? ).

  26. This guy has the creepiest voice I've ever heard. Like a cross between Alfred Hitchcock and Vincent Price. lol He should be narrating horror movies or something.

  27. I almost bought silver at $13.85, back in December. However, when the Fed hiked interest rates, I decided to hold out for a lower price. The other factor was the high markup of $2.50 an ounce, that most retailers are charging now. I used to be able to get it for just .50 over spot, back in 2005-2006. Back then, I bought 1000 ounces at $8, but had to sell it all at $12-14 in order to pay my rent and bills. It sucked watching to go to $50 without me though. Now I have a little bit of cash in a brokerage account and am shorting tech stocks. After the market crashes, I may move it into paper silver or gold stocks or cash out and buy physical silver. Not sure yet. There are pros and cons to both methods. With the SLV (silver ETF), you can buy and sell it at any time (very liquid) and the commissions are much cheaper. You can also choose to leverage it with USLV (x3 silver ETF) or buy and sell gold stocks instead. So, you could potentially make 3 times as much profit on your investment (or more) as you could with physical, if you time it right. However, if the SHTF before you can cash out, and the dollar is no longer accepted as currency, you could end up losing it all. With physical silver, there are high commissions/mark ups and low liquidity (you can only sell if you can find a buyer), but you'll have the physical when the SHTF and dollars are no longer accepted as currency. However, you'd then have to barter with it on the black market and may discover that those who have food and supplies will charge a very large markup because they know that you're desperate and need food to survive. Also you won't be able to just walk into a grocery store or Wal Mart with a bag of silver and buy stuff. So, it might make more sense to stock up on food and supplies instead.

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